Governor’s May Revise includes increases for health care, homelessness

Governor Newsom presented his May Budget Revision on May 9, 2019. The revision offers a mix of new spending proposals that would increase the state’s overall spend by almost $4.5 billion to a total of $213 billion.

 

Get the latest state-specific policy intelligence for the health care sector delivered to your inbox.

 

At the top of the list for agency budget increases in the revision is the Department of Health and Human Services, which sees an increase of $1.7 billion over the governor’s original proposal to a new total of $66.5 billion. This represents 31.2% of the state’s total spend, just shy of K thru 12 Education at 28.4%.

 

California 2019-20 May Revision to the Governor’s Budget

 

The revised budget proposes additional spending to fund several initiatives not previously detailed in the January budget proposal including:

  • An additional $295.3 million to expand health insurance exchange subsidy eligibility to 600% FPL,
  • $8.2 million to implement a state-based individual mandate penalty, the revenue of which will be allocated to the additional subsidies,
  • $120 million of Prop. 56 funds for loan repayment for physicians and dentists who commit to serving Medi-Cal patients,
  • $100 million from the Mental Health Services Fund (one-time funding available over five years) for the new 2020-25 Workforce Education and Training (WET) Five-Year Plan,
  • $70 million additional one-time funding for the Value-Based Payments program, specifically for behavioral health integration,
  • $25 million in 2019-20 ($60 million over three years) to train providers to conduct the trauma screenings in children,
  • $11.3 million to restore optician and optical lab services for adult beneficiaries in the Medi-Cal program,
  • $20 million additional over 5 years for the expansion of Whole Person Care Pilots.

In addition to the increases for healthcare, the revision also includes up to $500 million in newly appropriated funds, for a total of $1 billion, to address the ongoing homelessness crisis. Grants to cities and local governments of over $650 million would go to support emergency shelters, rental assistance, and the development and construction of permanent affordable housing.

Much of the added money in the larger proposal is projected to come from a higher than originally estimated budget surplus. The budget revised upward estimates of both personal and corporate tax revenues by just over $3.5 billion based on the strong stock market and stronger than anticipated corporate tax receipts received through April.

In a press statement, Governor Newsom said about the changes,

“This budget fortifies California’s fiscal position while making long-sighted investments to increase affordability for California families. The affordability crisis families face in this state is very real, and that’s why this budget tackles those challenges head-on by focusing on housing, health care, early childhood and higher education.”

The budget will now go to the Legislature for negotiation and passage. The Legislature must pass the 2019-2020 budget by June 15th or face withheld paychecks.